Consumer Price Indices Briefing Notes - March 2016

BRIEFING NOTE

Consumer Price Inflation March 2016

Coverage: UK Date: 12 April 2016 Geographical Area: UK Theme: Economy

CONTENTS

SUMMARY 2 CPI SUMMARY 5 CPI NOTABLE MOVEMENTS 7 CPI DETAILED BRIEFING 8 RPI SUMMARY 25 RPI NOTABLE MOVEMENTS 26 RPI DETAILED BRIEFING 27 RECONCILIATION OF CPI AND RPI 35 RPI MISCELLANEOUS DATA 36 OUTLOOK 37

This note is produced as background briefing for the Consumer Price Inflation Statistical

Bulletin. Users who require authoritative figures should use the Consumer Price Inflation

Statistical Bulletin or Consumer Price Inflation Dataset.

1

Statistical Bulletin: Briefing Note, Consumer Price Inflation March 2016:

SUMMARY Consumer Prices Index (CPI) The CPI is a measure of consumer price inflation produced to international standards and in line

with European regulations. First published in 1997 as the Harmonised Index of Consumer Prices

(HICP), the CPI is the inflation measure used in the Government’s target for inflation.

The CPI is also used for purposes such as uprating pensions, wages and benefits and can aid in

the understanding of inflation on family budgets. For more information see Users and uses of

consumer price inflation statistics (2013).

The main movements for CPI in March 2016 are:

• The all items CPI is 100.2, up from 99.8 in February.

• The all items CPI annual rate is 0.5%, up from 0.3% in February.

• The annual rate for CPI excluding indirect taxes, CPIY, is 0.4%, up from 0.2% last month.

• The annual rate for CPI at constant tax rates, CPI-CT, is 0.4%, up from 0.2% last month.

• The CPI all goods index is 98.8, up from 98.6 in February.

• The CPI all goods index annual rate is -1.6%, unchanged from last month.

• The CPI all services index is 101.7, up from 101.1 in February.

• The CPI all services index annual rate is 2.8%, up from 2.4% last month.

CPIH CPIH has been re-assessed to evaluate the extent to which it meets the professional standards set

out in the Code of Practice for Official Statistics and the assessment report published on 3 March

2016. The report includes a number of requirements that need to be implemented for CPIH to

regain its status as a National Statistic. The actions taken to address these requirements will be

reported to the UK Statistics Authority by September 2016.

CPIH is a measure of UK consumer price inflation that includes owner occupiers’ housing costs

(OOH). These are the costs of housing services associated with owning, maintaining and living in

one’s own home. OOH does not include costs such as utility bills, minor repairs and maintenance

which are already included in the index.

CPIH uses an approach called rental equivalence to measure OOH. Rental equivalence uses the

rent paid for an equivalent house as a proxy for the costs faced by an owner occupier. In other

words this answers the question “how much would I have to pay in rent to live in a home like

mine?” for an owner occupier. OOH does not seek to capture increases in house prices. Although

this may be inconsistent with some users’ expectations of measures of OOH, the inclusion of an

2

http://webarchive.nationalarchives.gov.uk/20160105160709/http:/www.ons.gov.uk/ons/guide-method/user-guidance/prices/cpi-and-rpi/index.html


https://www.statisticsauthority.gov.uk/publication/statistics-on-consumer-price-inflation-including-owner-occupiers-housing-costs/


asset price and therefore capital gains would make the index less suitable for a measure of

consumption. OOH currently accounts for 16.5% of the expenditure weight of CPIH. This compares

with a weight of 19.5% in 2005.

Currently, the method of calculation, the population coverage and the basket of goods and services

are the same as the Consumer Prices Index (CPI), with the exception of OOH. The method of

deriving the weights for CPIH and the data used for these are also the same as for CPI, with the

exception of OOH. This can result in some differences from the CPI.

The main movements for CPIH in March 2016 are:

• The all items CPIH is 100.4, up from 100.1 in February.

• The all items CPIH annual rate is 0.7%, up from 0.6% in February.

• The annual rate for CPIH excluding indirect taxes, CPIHY, is 0.8%, up from 0.6% last month.

• The OOH component of CPIH is 101.5, up from 101.3 in February.

• The OOH component annual rate is 2.1%, up from 2.0% last month.

• The CPIH all goods index is 98.8, up from 98.7 in February.

• The CPIH all goods index annual rate is -1.6%, unchanged from last month.

• The CPIH all services index is 101.6, up from 101.1 in February.

• The CPIH all services index annual rate is 2.6%, up from 2.2% last month.

Retail Prices Index (RPI) and RPIJ In accordance with the Statistics and Registration Service Act 2007, the Retail Prices Index and its derivatives have been assessed against the Code of Practice for Official Statistics and found not to meet the required standard for designation as National Statistics. The full assessment report can be found on the UK Statistics Authority website. The RPI is a long-standing measure of UK inflation that has historically been used for a wide range

of purposes such as the indexation of pensions, rents and index-linked gilts. For further information

see Users and uses of consumer price inflation statistics (2013).

RPIJ is an improved variant of the Retail Prices Index which is calculated using formulae that meet

international standards. The rationale for creating RPIJ was to give users a better alternative to the

RPI if their needs were for a measure of inflation based on the same population, classifications,

weights, etc. as the RPI. Currently, RPIJ also acts as an analytical series, in that it allows users to

see the impact of using the Jevons (which meets international standards) in place of the Carli

formula (which does not meet international standards) in the RPI. The use of the different formulae

at the elementary aggregate level is currently the only difference between these indices. Detailed

goods and services indices for RPIJ are not produced.

3

http://www.statisticsauthority.gov.uk/assessment/assessment/assessment-reports/assessment-report-246---the-retail-prices-index.pdf

http://www.statisticsauthority.gov.uk/assessment/assessment/assessment-reports/assessment-report-246---the-retail-prices-index.pdf



The main movements for RPI and RPIJ in March 2016 are:

• The all items RPI is 261.1, up from 260.0 in February.

• The all items RPI annual rate is 1.6%, up from 1.3% last month.

• The all items RPIJ is 239.4, up from 238.7 in February.

• The all items RPIJ annual rate is 0.8%, up from 0.6% last month.

• The annual rate for RPIX, the all items RPI excluding mortgage interest payments (MIPs)

index, is 1.6%, up from 1.4% last month.

• The all goods RPI is 197.8, up from 197.0 in February.

• The all goods RPI annual rate is -0.6%, down from -0.5% last month.

• The all services RPI is 357.2, up from 355.5 in February.

• The all services RPI annual rate is 2.9%, up from 2.4% last month.

• The annual rate for RPIY, the all items RPI excluding MIPs and indirect taxes index, is 1.7%,

up from 1.4% last month.

• The Tax and Price Index (TPI) for March is 228.0, up from 226.9 in February.

• The TPI annual rate is 1.1%, up from 0.8% last month.

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CPI SUMMARY CONTRIBUTIONS TO CHANGE IN THE CPI ANNUAL RATE

CPI COICOP DIVISIONS Weight Weight 1 month 1 month Contribution

2015 2016 % change % change to CPI annual

Mar 2015 Mar 2016 rate change

01: Food and non-alcoholic beverages 110 103 -0.2 -0.6 -0.05

02: Alcoholic beverages and tobacco 43 42 -0.1 -0.3 -0.01

03: Clothing and footwear 70 71 -0.1 1.0 0.08

04: Housing, water, electricity, gas and other fuels 128 120 -0.4 -0.2 0.02

05: Furniture, household equipment and maintenance 59 59 0.4 0.7 0.02

06: Health 25 28 0.4 0.2 -0.01

07: Transport 149 153 0.7 1.7 0.14

08: Communication 31 32 0.2 -0.4 -0.02

09: Recreation and culture 147 148 0.4 0.3 -0.01

10: Education 26 25 - - -

11: Restaurants and hotels 121 123 0.2 0.5 0.04

12: Miscellaneous goods and services 91 96 0.2 - -0.02

Large upward effects came from:

• Transport, where prices overall rose by 1.7% between February and March this year

compared with a rise of 0.7% between the same 2 months a year ago. By far the largest

upward effect came from air transport where the timing of Easter contributed to fares rising

by 22.9% between February and March 2016. Fares rose by 2.7% between the same 2

months in 2015. There was also a smaller upward effect from rail passenger transport with

fares rising this year but falling a year ago. These upward effects were partially offset by a

downward contribution from motor fuels with petrol prices rising by 0.9 pence per litre this

year compared with a larger rise of 3.8 pence per litre a year ago;

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• Clothing and footwear; where prices overall rose by 1.0% between February and March

this year compared with a fall of 0.1% between the same 2 months a year ago. Last year

was the first time that prices had fallen between February and March since the CPI started

in 1996. Normally they rise as they continue to recover following the January sales period.

The upward contribution this year came from price movements across a range of women’s

outerwear; and

• Restaurants and hotels, where prices overall rose by 0.5% between February and March

2016 compared with a rise of 0.2% between the same 2 months a year ago. The upward

effect came principally from restaurant and café prices rising by more than a year ago.

Small upward effects came from:

• Housing, water, electricity, gas and other fuels, where prices overall fell by 0.2%

between February and March this year compared with a larger fall of 0.4% between the

same months a year ago. The upward contributions came from gas and liquid fuels; and

• Furniture, household equipment and maintenance, where prices overall rose by 0.7%

between February and March this year compared with a smaller rise of 0.4% a year ago.

A large downward effect came from:

• Food and non-alcoholic beverages, where prices overall fell by 0.6% between February

and March this year compared with a fall of 0.2% between the same 2 months a year ago.

The overall downward contribution came from a variety of product groups, most notably

vegetables.

Small downward effects came from:

• Miscellaneous goods and services, where prices overall were little changed between

February and March this year compared with a rise of 0.2% between the same months a

year ago; and

• Communication, where prices overall fell by 0.4% between February and March this year

compared with a rise of 0.2% a year ago.

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CPI NOTABLE MOVEMENTS

All items CPI

Annual rate +0.5%, up from +0.3% last month

Also +0.5% in December 2014

Last higher in November 2014 (+1.0%)

All items CPI exc energy, food,

alcohol and tobacco


Also +1.5% in October 2014 and September 2014

Last higher in August 2014 (+1.9%)

Furniture, household equipment and

maintenance


Also +0.6% in October 2015

Last higher in January 2015 (+0.8%)

Transport Annual rate -0.1%, up from -1.1% last month

Highest since October 2014 (+0.5%)

Restaurants and hotels Annual rate +2.1%, up from +1.9% last month

Highest since February 2015 (+2.2%)

All goods

Annual rate -1.6%, unchanged from last month

Last higher in January 2016 (-1.5%)

Last lower in December 2015 (-2.1%)

All services Annual rate +2.8%, up from +2.4% last month

Highest since December 2015 (+2.9%)

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CPI DETAILED BRIEFING

• Weights are specified as parts per 1000 in the CPI.

01 FOOD & NON-ALCOHOLIC BEVERAGES

Weight Weight 1 month 1 month Contribution



01 Food & non-alcoholic beverages 110 103 -0.2 -0.6 -0.05

• Largest downward effect on the all items 12-month rate change.

• Due to food.

01.1 Food Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 01.1 Food 97 91 -0.2 -0.7 -0.05 01.1.1 Bread and cereals 16 15 -0.3 -0.1 - 01.1.2 Meat 22 21 -0.7 -0.7 - 01.1.3 Fish 4 4 -1.9 -2.5 - 01.1.4 Milk, cheese and eggs 14 12 1.2 -0.1 -0.02 01.1.5 Oils and fats 2 2 -2.7 -10.0 -0.02 01.1.6 Fruit 10 9 0.1 2.4 0.02 01.1.7 Vegetables including potatoes 14 13 -0.3 -2.4 -0.03 01.1.8 Sugar, jam, syrups, chocolate and confectionery 12 12 0.6 -0.9 -0.02 01.1.9 Food products not elsewhere covered 3 3 -1.2 0.8 0.01

• Large downward effect on the all items 12-month rate change.

• Due to vegetables including potatoes; milk, cheese and eggs; sugar, jam, syrups, chocolate and confectionery; and oils and fats.

• Partially offset by fruit and food products not elsewhere covered.

Milk, cheese and eggs

• Small downward effect.

• Prices overall fell this year but rose a year ago, with the main downward contributions

coming from shop bought milk and tubs of cheese spread.

Oils and fats


• Prices overall fell this year by more than a year ago, particularly for margarine/low fat spread.

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Fruit

• Small upward effect.

• Prices overall rose this year by more than a year ago, with the main upward contributions

coming from blueberries and strawberries.

Vegetables including potatoes


• Prices overall fell this year by more than a year ago, with the main downward contributions

coming from premium potato crisps, baked beans and canned tomatoes.

Sugar, jam, syrups, chocolate and confectionery


• Prices overall fell this year but rose a year ago, particularly for bags of non-chocolate sweets.

Food products not elsewhere covered


• Prices overall rose this year but fell a year ago, particularly for cook-in sauces.

01.2 Non-alcoholic beverages



Mar 2015 Mar 2016 rate change 01.2 Non-alcoholic beverages 13 12 -0.2 - - 01.2.1 Coffee, tea and cocoa 3 3 -2.2 0.1 0.01 01.2.2 Mineral waters, soft drinks and juices 10 9 0.4 - -

• Negligible overall effect on the all items 12-month rate change.

• There is a small upward contribution coming from coffee, tea and cocoa, where prices

overall rose this year but fell a year ago.

02 ALCOHOLIC BEVERAGES AND TOBACCO



Mar 2015 Mar 2016 rate change 02 Alcoholic beverages and tobacco 43 42 -0.1 -0.3 -0.01

• Small downward effect on the all items 12-month rate change.

• Due to alcoholic beverages.

• Partially offset by tobacco.

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02.1 Alcoholic Beverages Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 02.1 Alcoholic beverages 19 19 -0.2 -0.9 -0.01 02.1.1 Spirits 5 5 -1.0 -0.3 - 02.1.2 Wine 9 9 -0.2 -0.9 -0.01 02.1.3 Beer 5 5 0.6 -1.3 -0.01


• Due to beer and wine.

Wine


• Prices overall fell this year by more than a year ago, with the main downward contributions

coming from cider and white wine.

• Partially offset by a small upward contribution coming from New World red wine, where

prices overall rose this year but fell a year ago.

Beer


• Prices overall fell this year but rose a year ago, with the main downward contribution coming

from large multipacks of lager.

02.2 Tobacco Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 02.2 Tobacco 24 23 -0.1 0.2 0.01

• Small upward effect on the all items 12-month rate change.

• Prices overall rose this year but fell a year ago.

03 CLOTHING AND FOOTWEAR



Mar 2015 Mar 2016 rate change 03 Clothing and footwear 70 71 -0.1 1.0 0.08

• Large upward effect on the all items 12-month rate change.

• Due to clothing.

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03.1 Clothing Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 03.1 Clothing 60 61 -0.3 1.0 0.08 03.1.2 Garments 54 54 -0.4 0.9 0.07 03.1.3 Other clothing and clothing accessories 5 6 0.8 2.0 0.01 03.1.4 Cleaning, repair and hire of clothing 1 1 0.3 0.2 -


• Due to garments and, to a lesser extent, other clothing and clothing accessories.

Garments

• Large upward effect.

• Prices overall rose this year but fell a year ago, with the main upward contributions coming

from women’s trousers, blouses/shirts, cardigans, jumpers and dresses and girls’ jackets.

• Partially offset by a small downward contribution coming from boys’ jeans, where prices

overall rose this year by less than a year ago.

Other clothing and clothing accessories


• Prices overall rose this year by more than a year ago, particularly for ladies’ scarves.

03.2 Footwear including repairs




03.2 Footwear including repairs 10 10 1.6 1.3 -


04 HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS



Mar 2015 Mar 2016 rate change 04 Housing, water, electricity, gas and other fuels 128 120 -0.4 -0.2 0.02


• Due to electricity, gas and other fuels.

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04.1 Actual rentals for housing



Mar 2015 Mar 2016 rate change 04.1 Actual rentals for housing 72 72 0.1 0.1 -


04.3 Regular maintenance and repair of the dwelling



Mar 2015 Mar 2016 rate change 04.3 Regular maintenance and repair of the dwelling 2 2 0.1 0.4 - 04.3.1 Materials for maintenance and repair 1 1 - 0.8 - 04.3.2 Services for maintenance and repair 1 1 0.1 0.1 -


04.4 Other services related to the dwelling



Mar 2015 Mar 2016 rate change 04.4 Other services related to the dwelling 12 11 - - - 04.4.1 Water supply 6 6 - - - 04.4.3 Sewerage collection 6 5 - - -


04.5 Electricity, gas and other fuels



Mar 2015 Mar 2016 rate change 04.5 Electricity, gas and other fuels 42 35 -1.3 -1.0 0.02 04.5.1 Electricity 20 17 - - - 04.5.2 Gas 20 16 -2.6 -2.6 0.01 04.5.3 Liquid fuels 1 1 -3.0 7.8 0.01 04.5.4 Solid fuels 1 1 0.1 -0.2 -


• Due to liquid fuels and gas.

12


Gas


• The upward contribution is due to weight changes in 2016. Average charges fell this year by

a similar amount to a year ago. However, as the weight for gas has decreased between 2015

and 2016, this has resulted in a small upward effect on the all items 12-month rate change.

Liquid fuels


• Average prices for kerosene rose this year but fell a year ago.

05 FURNITURE, HOUSEHOLD EQUIPMENT AND MAINTENANCE



Mar 2015 Mar 2016 rate change 05 Furniture, household equipment and maintenance 59 59 0.4 0.7 0.02


• Due to furniture, furnishings and carpets; and household textiles.

• Partially offset by glassware, tableware and household utensils; and tools and equipment for house and garden.

05.1 Furniture, furnishings and carpets



Mar 2015 Mar 2016 rate change 05.1 Furniture, furnishings and carpets 21 20 0.8 1.7 0.02 05.1.1 Furniture and furnishings 15 16 1.8 1.6 - 05.1.2 Carpets and other floor coverings 6 4 -1.7 2.2 0.02


• Due to carpets and other floor coverings, where prices overall rose this year but fell a year

ago, with the main upward contributions coming from floor rugs and tufted carpets.

05.2 Household textiles Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 05.2 Household textiles 6 7 0.2 1.0 0.01


• Prices overall rose this year by more than a year ago. 13


05.3 Household appliances, fitting and repairs



Mar 2015 Mar 2016 rate change 05.3 Household appliances, fitting and repairs 8 8 0.2 0.6 - 05.3.1/2 Major appliances and small electric goods 7 7 0.2 0.7 - 05.3.3 Repair of household appliances 1 1 - - -


05.4 Glassware, tableware and household utensils



Mar 2015 Mar 2016 rate change 05.4 Glassware, tableware and household utensils 6 6 0.8 -0.1 -0.01


• Prices overall fell this year but rose a year ago.

05.5 Tools and equipment for house and garden



Mar 2015 Mar 2016 rate change 05.5 Tools and equipment for house and garden 5 5 0.2 -0.8 -0.01



05.6 Goods and services for routine maintenance



Mar 2015 Mar 2016 rate change 05.6 Goods and services for routine maintenance 13 13 -0.1 0.1 - 05.6.1 Non-durable household goods 5 5 -0.6 -0.2 - 05.6.2 Domestic services and household services 8 8 0.1 0.2 -


14


06 HEALTH Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 06 Health 25 28 0.4 0.2 -0.01


• Due to medical products, appliances and equipment.

06.1 Medical products, appliances and equipment



Mar 2015 Mar 2016 rate change 06.1 Medical products, appliances and equipment 12 13 0.8 0.3 -0.01 06.1.1 Pharmaceutical products 7 8 1.6 0.3 -0.01 06.1.2/3 Other medical and therapeutic equipment 5 5 -0.4 0.2 -


• Due to pharmaceutical products, where prices overall rose this year by less than a year

ago, with the main downward contributions coming from tablets/capsules of pain killers and

multi-vitamins.

06.2 Out-patient services Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 06.2 Out-patient services 5 7 0.2 0.2 - 06.2.1/3 Medical and paramedical services 3 4 0.1 - - 06.2.2 Dental services 2 3 0.4 0.4 -


06.3 Hospital services Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 06.3 Hospital Services 8 8 - 0.1 -


15


07 TRANSPORT Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 07 Transport 149 153 0.7 1.7 0.14

• Largest upward effect on the all items 12-month rate change.

• Due to transport services and, to a lesser extent, purchase of vehicles.

• Partially offset by operation of personal transport equipment.

07.1 Purchase of vehicles Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 07.1 Purchase of vehicles 40 43 -0.2 - 0.01 07.1.1A New cars 24 25 - - - 07.1.1B Second-hand cars 14 16 -0.8 - 0.01 07.1.2/3 Motorcycles and bicycles 2 2 1.7 -0.9 -0.01


• Due to second-hand cars.

• Partially offset by motorcycles and bicycles.

Second-hand cars


• Prices overall were little changed this year but fell a year ago.

Motorcycles and bicycles



07.2 Operation of personal transport equipment



Mar 2015 Mar 2016 rate change 07.2 Operation of personal transport equipment 77 73 1.5 0.7 -0.06 07.2.1 Spare parts and accessories 6 5 - 0.3 - 07.2.2 Fuels and lubricants 34 32 3.4 1.2 -0.08 07.2.3 Maintenance and repairs 23 22 0.1 0.3 - 07.2.4 Other services 14 14 0.1 0.4 -

• Large downward effect on the all items 12-month rate change.

• Due to fuels and lubricants. 16


Fuels and lubricants

• Large downward effect.

• The average price of petrol across the month, as recorded for the CPI, rose by 0.9 pence per

litre between February and March 2016 to stand at 102.3 pence per litre.

• Last year, the average price of petrol rose by 3.8 pence per litre between February and

March 2015 to stand at 110.8 pence per litre.

• The average price of diesel rose by 2.0 pence per litre between February and March 2016 to

stand at 103.1 pence per litre, compared with a larger rise of 3.5 pence per litre a year earlier

to stand at 118.0 pence per litre.

07.3 Transport services Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 07.3 Transport services 32 37 - 5.4 0.20 07.3.1 Passenger transport by railway 12 13 -0.9 1.2 0.03 07.3.2 Passenger transport by road 12 12 -0.8 -0.1 0.01 07.3.3 Passenger transport by air 6 8 2.7 22.9 0.18 07.3.4 Passenger transport by sea and inland waterway 2 4 2.3 -1.0 -0.01


• Due to passenger transport by air and, to a lesser extent, passenger transport by railway and passenger transport by road.

• Partially offset by passenger transport by sea and inland waterway.

Passenger transport by railway


• Average charges for international rail journeys rose this year but fell a year ago.

Passenger transport by road


• Average coach fares fell this year by less than a year ago.

Passenger transport by air

• Large upward effect.

• Average air fares rose this year by more than a year ago, particularly for European flights

and, to a lesser extent, long haul and domestic routes.

Passenger transport by sea and inland waterway


• Average sea fares fell this year but rose a year ago. 17


08 COMMUNICATION Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 08 Communication 31 32 0.2 -0.4 -0.02


• Due to telephone equipment and services.

08.1 Postal services Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 08.1 Postal services 2 2 - - -


08.2/3 Telephone equipment and services



Mar 2015 Mar 2016 rate change 08.2/3 Telephone equipment and services 29 30 0.2 -0.5 -0.02


• Prices overall fell this year but rose a year ago, with the main downward contributions

coming from landline telephone handsets and mobile phone applications.

09 RECREATION AND CULTURE



Mar 2015 Mar 2016 rate change 09 Recreation and culture 147 148 0.4 0.3 -0.01


• Due to books, newspapers and stationery; recreational and cultural services; and other recreational items, gardens and pets.

• Partially offset by audio-visual equipment and related products.

18


09.1 Audio-visual equipment and related products



Mar 2015 Mar 2016 rate change 09.1 Audio-visual equipment and related products 23 18 -0.5 0.8 0.03 09.1.1 Equipment for the reception and reproduction of sound and pictures 5 5 -0.5 - - 09.1.2 Photographic, cinematographic and optical equipment 3 2 -1.8 -0.4 0.01 09.1.3 Data processing equipment 9 7 -0.3 0.8 0.01 09.1.4 Recording media 5 3 - 2.7 0.01 09.1.5 Repair of audio-visual equipment and related products 1 1 0.2 0.3 -


• Due to data processing equipment; recording media; and photographic, cinematographic and optical equipment.

Photographic, cinematographic and optical equipment


• Prices overall fell this year by less than a year ago, with the main upward contribution coming

from digital camcorders.

Data processing equipment



Recording media


• Prices overall rose this year but were little changed a year ago, with the main upward

contribution coming from DVDs.

09.2 Other major durables for recreation and culture



Mar 2015 Mar 2016 rate change 09.2.1/2 Major durables for in/outdoor recreation 10 12 - 0.1 -


19


09.3 Other recreational items, gardens and pets



Mar 2015 Mar 2016 rate change 09.3 Other recreational items, gardens and pets 36 35 1.6 1.4 -0.01 09.3.1 Games, toys and hobbies 21 20 2.5 2.2 -0.01 09.3.2 Equipment for sport and open-air recreation 4 3 2.1 1.6 - 09.3.3 Gardens, plants and flowers 4 4 -0.1 -0.5 - 09.3.4/5 Pets, related products and services 7 8 -0.6 0.3 0.01


• Due to games, toys and hobbies.

• Partially offset by pets, related products and services.

Games, toys and hobbies


• Prices overall rose this year by less than a year ago, with the main downward contribution

coming from preschool activity toys.

• Partially offset by a small upward contribution coming from computer games, where prices

overall rose this year by more than a year ago.

Pets, related products and services



09.4 Recreational and cultural services



Mar 2015 Mar 2016 rate change 09.4 Recreational and cultural services 31 33 0.6 0.2 -0.01 09.4.1 Recreational and sporting services 8 10 0.1 0.3 - 09.4.2 Cultural services 23 23 0.8 0.2 -0.01


• Due to cultural services, where average admission charges for theatres fell this year but

rose a year ago.

20


09.5 Books, newspapers and stationery



Mar 2015 Mar 2016 rate change 09.5 Books, newspapers and stationery 14 14 0.3 -1.1 -0.02 09.5.1 Books 4 4 2.0 -5.5 -0.03 09.5.2 Newspapers and periodicals 5 5 -1.0 0.9 0.01 09.5.3/4 Misc. printed matter, stationery, drawing materials 5 5 0.2 0.3 -


• Due to books, where overall prices for non-fiction hardbacks fell this year but rose a year

ago.

• Partially offset by newspapers and periodicals, where average prices for national daily

newspapers rose this year but were unchanged a year ago.

09.6 Package holidays Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 09.6 Package holidays 33 36 -0.1 -0.1 -


10 EDUCATION Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 10 Education 26 25 - - -


11 RESTAURANTS AND HOTELS



Mar 2015 Mar 2016 rate change 11 Restaurants and hotels 121 123 0.2 0.5 0.04


• Due to catering services and accommodation services.

21


11.1 Catering services Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 11.1 Catering services 100 101 0.1 0.3 0.02 11.1.1 Restaurants and cafes 91 93 0.2 0.3 0.02 11.1.2 Canteens 9 8 -0.4 - -


• Due to restaurants and cafes, where prices overall rose this year by more than a year ago,

with the main upward contributions coming from a variety of on sale alcohol items.

11.2 Accommodation services



Mar 2015 Mar 2016 rate change 11.2 Accommodation services 21 22 0.9 1.4 0.01


• Charges overall rose this year by more than a year ago, particularly for overnight hotel

accommodation.

12 MISCELLANEOUS GOODS AND SERVICES



Mar 2015 Mar 2016 rate change 12 Misc. goods and services 91 96 0.2 - -0.02


• Due to personal effects not elsewhere covered, personal care, and other services not elsewhere covered.

• Partially offset by financial services not elsewhere covered.

22


12.1 Personal care Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 12.1 Personal care 30 31 0.5 0.3 -0.01 12.1.1 Hairdressing and personal grooming establishments 7 8 - 0.3 - 12.1.2/3 Appliances and products for personal care 23 23 0.6 0.3 -0.01


• Due to appliances and products for personal care, where prices overall rose this year by

less than a year ago, with the main downward contributions coming from baby wipes,

personal hygiene products and toothpaste. Partially offset by small upward contributions

coming from electric razors and toothbrushes.

12.3 Personal effects not elsewhere covered



Mar 2015 Mar 2016 rate change 12.3 Personal effects not elsewhere covered 14 16 0.5 -0.7 -0.02 12.3.1 Jewellery, clocks and watches 9 9 -0.3 -0.6 - 12.3.2 Other personal effects 5 7 2.0 -0.9 -0.02


• Due to other personal effects, where prices overall fell this year but rose a year ago,

particularly for trolley cases.

12.4 Social protection Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 12.4 Social protection 13 16 0.2 0.2 -


23


12.5 Insurance Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change 12.5 Insurance 10 9 -0.2 -0.1 - 12.5.2 House contents insurance 2 2 -0.1 -1.8 - 12.5.3 Health insurance 3 3 - - - 12.5.4 Transport insurance 5 4 -0.3 0.6 -


12.6 Financial services not elsewhere covered



Mar 2015 Mar 2016 rate change 12.6 Financial services not elsewhere covered 12 12 -0.4 0.2 0.01


• Prices overall rose this year but fell a year ago, with the main upward contribution coming

from mortgage arrangement fees.

12.7 Other services not elsewhere covered



Mar 2015 Mar 2016 rate change 12.7 Other services not elsewhere covered 12 12 0.3 -0.2 -0.01



24


RPI SUMMARY CONTRIBUTIONS TO CHANGE IN THE RPI ANNUAL RATE

GROUPS Weight Weight 1 month 1 month Contribution

2015 2016 % change % change to RPI annual


FOOD 109 102 -0.3 -0.4 -0.02

CATERING 47 47 0.1 0.2 0.01

ALCOHOLIC DRINKS 56 57 0.2 0.1 -

TOBACCO 27 25 - 0.2 0.01

HOUSING 263 266 - 0.1 0.04

FUEL AND LIGHT 45 41 -1.4 -0.9 0.03

HOUSEHOLD GOODS 59 62 0.7 1.3 0.04

HOUSEHOLD SERVICES 65 67 - -0.4 -0.02

CLOTHING AND FOOTWEAR 42 41 1.3 2.1 0.03

PERSONAL GOODS AND SERVICES 41 42 0.5 0.1 -0.01

MOTORING EXPENDITURE 115 117 1.0 0.4 -0.07

FARES AND OTHER TRAVEL COSTS 25 26 0.6 8.4 0.21

LEISURE GOODS 28 29 0.6 0.6 -

LEISURE SERVICES 78 78 0.1 0.1 -

25


RPI NOTABLE MOVEMENTS

All items RPI


Also +1.6% in December 2014

Last higher in November 2014 (+2.0%)

All items RPI exc MIPS (RPIX) Annual rate +1.6%, up from +1.4% last month


All items RPI exc MIPS and indirect

taxes (RPIY)



Catering


Also +1.9% in February 2015

Last higher in January 2015 (+2.0%)

All goods Annual rate -0.6%, down from -0.5% last month

Lowest since December 2015 (-1.2%)

All services


Also +2.9% in December 2015, October 2014, September

2014 and August 2014

Last higher in April 2014 (+3.0%)

26


RPI DETAILED BRIEFING

In accordance with the Statistics and Registration Service Act 2007, the Retail Prices Index and its

derivatives have been assessed against the Code of Practice for Official Statistics and found not to

meet the required standard for designation as National Statistics. A consultation was carried out in

March 2013 on whether to maintain this detailed RPI briefing and, based on views received, it was

decided to continue with its publication.

• Weights are specified as parts per 1000 in the RPI.

FOOD Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change FOOD 109 102 -0.3 -0.4 -0.02


• Due to non-seasonal food.

• Partially offset by seasonal food.

Seasonal Food Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change SEASONAL FOOD 18 18 -0.8 -0.1 0.01 Home killed lamb 1 1 -1.3 -4.8 - Fresh fish 2 2 -3.1 -3.0 - Eggs 1 1 -1.2 -6.5 -0.01 Unprocessed potatoes 2 1 -1.4 -2.4 - Other fresh vegetables 6 6 -0.4 0.5 0.01 Fresh fruit 6 7 - 2.4 0.02


• Due to:

• Fresh fruit, where prices overall rose this year but were little changed a year ago, with

the main upward contribution coming from blueberries; and

• Other fresh vegetables, where prices overall rose this year but fell a year ago.

• Partially offset by a small downward contribution coming from eggs, where prices overall fell

this year by more than a year ago.

27


Non-Seasonal Food Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change NON-SEASONAL FOOD 91 84 -0.1 -0.6 -0.03 Bread 4 4 -0.6 -1.7 - Cereals 4 4 - 0.5 - Biscuits and cakes 7 6 - 1.1 0.01 Beef 4 4 -1.5 -3.0 -0.01 Imported lamb 1 1 -0.9 0.5 - Pork 1 1 - 0.7 - Bacon 2 1 -0.8 -2.2 - Poultry 4 4 -0.1 -0.3 - Other meat 7 6 -0.3 0.2 - Processed fish 2 2 -2.3 0.1 - Butter 1 1 -4.3 -3.2 - Oils and fats 1 1 -1.1 -14.5 -0.01 Cheese 4 3 2.2 -0.4 -0.01 Milk, fresh 3 3 1.2 -0.5 - Milk products 4 4 0.9 3.1 0.01 Tea 1 1 -3.0 -0.2 - Soft drinks 10 9 0.3 0.1 - Sugar and preserves 1 1 -3.7 -2.1 - Sweets and chocolates 11 11 1.2 -1.0 -0.02 Potato products 3 2 -1.2 -4.7 -0.01 Processed vegetables 2 2 3.5 -4.6 -0.02 Processed fruit 2 1 -1.4 0.6 - Other foods 11 10 -1.5 0.5 0.02 Coffee and other hot drinks 1 2 -1.5 0.8 -


• Due to:

• Sweets and chocolates, processed vegetables and cheese, where prices overall fell

this year but rose a year ago, with the main downward contributions coming from

baked beans, canned tomatoes, bags of non-chocolate sweets and cheese spread;

and

• Beef, oils and fats and potato products, where prices overall fell this year by more

than a year ago, with the main downward contributions coming from margarine/low fat

spread and premium potato crisps.

• Partially offset by:

• Other foods, where prices overall rose this year but fell a year ago, particularly for

cook-in sauces and tomato ketchup. Partially offset by a small downward contribution

coming from canned soup, where prices overall fell this year but rose a year ago;

• Biscuits and cakes, where prices overall rose this year but were little changed a year

ago; and

• Milk products, where prices overall rose this year by more than a year ago,

particularly for yoghurt/fromage frais. 28


CATERING Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change CATERING 47 47 0.1 0.2 0.01 Restaurant meals 28 28 0.1 0.3 - Canteen meals 3 3 -0.3 0.1 - Take-away meals and snacks 16 16 - 0.2 -


• Prices overall rose this year by more than a year ago.

ALCOHOLIC DRINKS Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change ALCOHOLIC DRINKS 56 57 0.2 0.1 - Beer on sales 19 19 0.4 0.5 - Beer off sales 5 5 -0.1 -3.0 -0.01 Wines and spirits on sales 18 19 0.2 0.7 0.01 Wines and spirits off sales 14 14 -0.1 -0.1 -


• There is a downward contribution coming from beer off sales, where prices overall fell this

year by more than a year ago, with the main downward contributions coming from lager and

cider.

• Offset by an upward contribution coming from wines and spirits on sales, where prices

overall rose this year by more than a year ago.

TOBACCO Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change TOBACCO 27 25 - 0.2 0.01 Cigarettes 23 21 -0.1 0.2 0.01 Other tobacco products 4 4 - 0.1 -


• Due to cigarettes, where prices overall rose this year but fell a year ago.

29


HOUSING Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change HOUSING 263 266 - 0.1 0.04 Rent 84 83 0.1 0.1 - Mortgage interest payments 29 28 -0.3 -0.1 0.01 Council tax and rates 40 40 - - - Water and other charges 14 13 - - - Repairs and maintenance charges 9 9 0.2 0.1 - DIY materials 8 7 0.2 0.5 - Dwelling insurance and ground rent 6 6 -0.9 -1.1 - House depreciation 73 80 -0.1 0.3 0.03


• Due to:

• House depreciation, with the smoothed house price index used to calculate this

component rising this year but falling a year ago; and

• Mortgage interest payments, where average charges fell this year by less than a year

ago.

FUEL AND LIGHT Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change FUEL AND LIGHT 45 41 -1.4 -0.9 0.03 Coal and solid fuels 1 1 0.2 -0.2 - Electricity 21 20 - - - Gas 21 18 -2.7 -2.7 0.01 Oil and other fuels 2 2 -2.5 6.7 0.02


• Due to:

• Oil and other fuels, where average prices for kerosene rose this year but fell a year

ago; and

• Gas, where the upward contribution is due to weight changes in 2016. Average

charges fell this year by a similar amount to a year ago. However, as the weight for gas

has decreased between 2015 and 2016, this has resulted in a small upward effect on

the all items 12-month rate change.

30


HOUSEHOLD GOODS Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change HOUSEHOLD GOODS 59 62 0.7 1.3 0.04 Furniture 22 25 1.7 2.4 0.02 Furnishings 9 8 -0.3 1.9 0.02 Electrical appliances 5 7 2.1 -0.1 -0.01 Other household equipment 4 4 0.6 -0.2 - Household consumables 12 11 -0.5 -0.1 - Pet care 7 7 -0.4 0.4 0.01


• Due to:

• Furnishings and pet care, where prices overall rose this year but fell a year ago, with

the main upward contributions coming from tufted carpets and floor rugs; and

• Furniture, where prices overall rose this year by more than a year ago, particularly for

leather settees.

• Partially offset by electrical appliances, where prices overall fell this year but rose a year

ago, particularly for vacuum cleaners.

HOUSEHOLD SERVICES Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change HOUSEHOLD SERVICES 65 67 - -0.4 -0.02 Domestic services 13 14 0.2 0.1 - Fees and subscriptions 26 27 -0.3 -0.7 -0.01 Postage 1 1 - - - Telephone charges 25 25 - -0.3 -0.01


• Due to:

• Telephone charges, where average fees fell this year but were little changed a year

ago, with the main downward contribution coming from mobile phone applications; and

• Fees and subscriptions, where average premiums for house contents insurance fell

this year by more than a year ago.

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CLOTHING AND FOOTWEAR



Mar 2015 Mar 2016 rate change CLOTHING AND FOOTWEAR 42 41 1.3 2.1 0.03 Men’s outerwear 8 9 1.3 1.3 - Women’s outerwear 16 15 0.7 2.8 0.03 Children’s outerwear 5 4 2.5 2.1 - Other clothing 5 5 0.3 1.3 0.01 Footwear 8 8 2.1 1.9 -


• Due to women’s outerwear and other clothing, where prices overall rose this year by more

than a year ago, with the main upward contributions coming from women’s cardigans, casual

trousers, jumpers and blouses/shirts.

PERSONAL GOODS & SERVICES



Mar 2015 Mar 2016 rate change PERSONAL GOODS & SERVICES 41 42 0.5 0.1 -0.01 Personal articles 10 12 0.8 -0.3 -0.01 Chemists' goods 17 15 0.6 0.4 - Personal services 14 15 0.1 0.2 -


• Due to personal articles, where prices overall fell this year but rose a year ago, particularly

for trolley cases.

MOTORING EXPENDITURE Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change MOTORING EXPENDITURE 115 117 1.0 0.4 -0.07 Purchase of motor vehicles 42 45 -0.4 - 0.02 Maintenance of motor vehicles 16 16 0.1 0.3 - Petrol and oil 35 33 3.3 0.6 -0.09 Vehicle tax and insurance 22 23 0.6 0.9 0.01

• Largest downward effect on the all items 12-month rate change.

• Due to petrol and oil, where prices overall rose this year by less than a year ago. The price

of petrol, as recorded for the RPI, rose by 0.2 pence per litre between February and March

2016, to stand at 101.7 pence per litre, compared with a larger rise of 3.7 pence per litre last

year to stand at 111.0 pence per litre. Diesel prices rose by 1.3 pence per litre, to stand at

32


102.5 pence per litre in March 2016, compared with a larger rise of 3.6 pence per litre last

year to stand at 118.3 pence per litre.

• Partially offset by:

• Purchase of motor vehicles, where prices overall were little changed this year but fell

a year ago, with the main upward contribution coming from second-hand cars; and

• Vehicle tax and insurance, where average premiums for car insurance rose this year

by more than a year ago.

FARES AND OTHER TRAVEL COSTS



Mar 2015 Mar 2016 rate change FARES AND OTHER TRAVEL COSTS 25 26 0.6 8.4 0.21 Rail fares 7 7 -0.7 0.9 0.01 Bus and coach fares 3 3 -1.3 -0.3 - Other travel costs 15 16 1.7 13.2 0.19

• Largest upward effect on the all items 12-month rate change.

• Due to:

• Other travel costs, where average air fares rose this year by more than a year ago;

and

• Rail fares, where average charges for international rail journeys rose this year but fell

a year ago.

LEISURE GOODS Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change LEISURE GOODS 28 29 0.6 0.6 - Audio-visual equipment 7 7 - - 0.01 CDs and tapes 2 2 0.7 2.3 - Toys, photographic and sports goods 8 9 2.0 1.5 - Books and newspapers 6 6 -0.2 -1.0 -0.01 Gardening products 5 5 0.1 -0.5 -


• There is an upward contribution coming from audio-visual equipment, with the main

upward effects coming from laptop and tablet computers.

• Offset by a downward contribution coming from books and newspapers, where prices

overall fell this year by more than a year ago, with the main downward effect coming from

non-fiction hardbacks. Partially offset by a small upward contribution coming from national

daily newspapers, where average prices rose this year but were unchanged a year ago.

33


LEISURE SERVICES Weight Weight 1 month 1 month Contribution


Mar 2015 Mar 2016 rate change LEISURE SERVICES 78 78 0.1 0.1 - TV licence and rentals 12 12 - - - Entertainment and other recreation 15 16 0.7 0.2 -0.01 Foreign holidays 41 40 -0.1 -0.1 - UK holidays 10 10 0.5 0.7 -


• There is a downward contribution coming from entertainment and other recreation, where

prices overall rose this year by less than a year ago, with the main downward contribution

coming from admission charges for theatres.

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RECONCILIATION OF CPI AND RPI

(Table 5 of the Consumer Price Inflation Dataset)

This table identifies the main factors contributing to the differences between the unrounded

inflation rates for the CPI and the RPI. These differences are broken down into: mortgage interest

payments, other housing components excluded from the CPI, other differences in the coverage of

goods and services, and the formula effect. The final column titled ‘other differences including

weights’ is derived as a residual.

The difference between the CPI and RPI unrounded annual rates in March 2016 was -1.06

percentage points, widening from -1.01 percentage points in February 2016.

Factors contributing to the widening were:

• Other differences including weights, which increased the RPI 12-month rate relative to

the CPI 12-month rate by 0.03 percentage points between February and March 2016. The

effect came mainly from food and non-alcoholic beverages, and air fares. This was partially

offset by clothing and footwear, and fuels and lubricants.

• Other housing components, which increased the RPI 12-month rate by 0.02 percentage

points between February and March 2016 but are excluded from the CPI. The effect came

mainly from house depreciation.

There were no notable offsetting factors.

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RPI MISCELLANEOUS DATA Selected Average Prices

Description January 2016

February 2016

March 2016

Petrol per litre Diesel £1.03 £1.01 £1.03

Petrol £1.02 £1.01 £1.02

Alcohol pub prices

Draught bitter (pint) £2.98 £2.97 £2.98

Draught lager (pint) £3.48 £3.44 £3.46

Whisky (per nip) £2.65 £2.65 £2.67

Cigarettes Per 20 king size £9.08 £9.08 £9.09 Average prices are as recorded for the RPI.

Changes in Mortgage Interest Rates

This table gives an estimate of the contribution that changes in the average mortgage interest rate (MI) make to the 1-month percentage change in the RPI.

Month 1-month % change in

the RPI Approx. change in

average MI rate Approx. contribution to

the 1-month % change in the RPI

March 2015 +0.2 Down -0.02% points -0.02% points

April 2015 +0.4 Down -0.01% points -0.01% points

May 2015 +0.2 Down -0.02% points -0.02% points

June 2015 +0.2 Down -0.01% points -0.01% points

July 2015 -0.1 Down -0.02% points -0.02% points

August 2015 +0.5 Down -0.02% points -0.02% points

September 2015 -0.1 Down -0.02% points -0.02% points

October 2015 0.0 Down -0.02% points -0.02% points

November 2015 +0.1 Down -0.01% points -0.01% points

December 2015 +0.3 Down -0.02% points -0.02% points

January 2016 -0.7 Down -0.01% points -0.01% points

February 2016 +0.5 Down -0.01% points -0.01% points

March 2016 +0.4 Down -0.01% points -0.01% points NB: A one percentage point change in the average mortgage interest rate contributes approx. 0.9 percentage points to the 1-month percentage change in the RPI.

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OUTLOOK

The outlook is a summary of seasonal trends, selected news cuttings and other sources of

information. It gives some indication of expected changes to the annual rate of the CPI and RPI in

the next few months.

FOOD

Seasonal Food

• Seasonal food prices have tended to show variable movements in April of recent years and

are typically dependent on weather conditions both in the UK and around the world.

Monthly % change for CPI seasonal food index Year February March April 2010 1.8 0.2 0.6 2011 0.6 -2.0 -1.1 2012 1.2 -0.2 -1.3 2013 1.6 -0.7 0.5 2014 -0.4 -0.5 -1.7 2015 -0.3 -0.4 -0.7 2016 1.3 -0.8

• Seasonal food prices in the RPI tend to show a similar movement.

ALCOHOLIC BEVERAGES AND TOBACCO

• As announced at Budget 2016, the following alcohol duty rates will increase in line with

inflation (based on RPI): sparkling cider and perry exceeding 5.5% alcohol by volume (abv)

but less than 8.5% abv; all wine and made-wine rates at or below 22% abv. The duty rates

on beer, spirits, wine and made-wine exceeding 22% abv, still cider and perry, and sparkling

cider and perry of a strength not exceeding 5.5% abv have been frozen.

• As announced at the 2016 Budget, duty rates on tobacco products will increase by 2% above

the RPI rate of inflation on all tobacco duty rates each year until the end of the next

Parliament. Budget 2016 also announced that hand-rolling tobacco duty would rise by an

additional 3% above this to 5% above retail price inflation.

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CLOTHING AND FOOTWEAR

• Prices for clothing and footwear tend to rise in April.

Monthly % change for CPI clothing and footwear index Year February March April 2010 2.0 1.8 2.2 2011 3.6 1.1 1.3 2012 2.9 2.2 0.2 2013 2.0 2.4 - 2014 1.1 1.8 1.0 2015 1.3 -0.1 0.7 2016 1.3 1.0

• The clothing and footwear group in the RPI exhibits a similar seasonal pattern.

ELECTRICITY, GAS AND OTHER FUELS

• EDF Energy has announced a 5% cut to its standard gas price effective from 24 March 2016.

(media.edfenergy.com 11 February 2016)

• npower has announced an average 5.2% or £32 average annual reduction to its standard

domestic gas tariff. This will be effective from Monday 28 March 2016.

(npowermediacentre.com 8 February 2016)

• SSE will reduce domestic gas prices on its standard tariff by an average of 5.3%, effective from

29 March 2016. (sse.com 28 January 2016)

FURNITURE, HOUSEHOLD EQUIPMENT AND MAINTENANCE

• Prices tend to fall in April.

Monthly % change for CPI furniture, household equipment and maintenance index

Year February March April 2010 1.1 1.6 -1.6 2011 1.4 1.7 -0.8 2012 1.5 1.3 -1.2 2013 1.5 0.8 -1.3 2014 2.4 0.3 -0.9 2015 1.4 0.4 -1.2 2016 1.7 0.7

• The household goods group in the RPI exhibits a similar seasonal pattern.

HEALTH

Prescription Charges

• The Department of Health has announced that NHS prescription charges for England will rise

by 20 pence to £8.40 from 1 April 2016. (www.gov.uk 11 March 2016)

38


NHS Dental Charges

• The Department of Health has announced that NHS dental charges for England will rise from

£18.80 to £19.70 for Band 1, from £51.30 to £53.90 for Band 2 and from £222.50 to £233.70

for Band 3 from 1 April 2016. (www.gov.uk 11 March 2016)

TRANSPORT

Fuels and Lubricants

• Oil futures have increased following a decline in U.S. inventories and drilling, while outages

and hopes that exporters could freeze output boosted international prices. U.S. West Texas

Intermediate (WTI) crude futures were trading at $40.17 per barrel, up 45 cents or 1.1

percent from their last close. International Brent crude futures were up 35 cents or 0.8

percent at $42.29 a barrel. (uk.reuters.com 11 April 2016)

• When considering the price of petrol between March and April 2016, it may be useful to note

that the average price of petrol rose by 2.0 pence per litre between March and April 2015,

standing at 112.8 pence per litre as measured in the CPI.

• A 1 pence change on average in the cost of a litre of motor fuel contributes approximately

0.03 percentage points to the 1-month change in the CPI.

Vehicle Excise Duty (VED)

• The March 2016 Budget announced that VED rates will increase in line with the Retail Prices

Index for cars, vans and motorcycles, with effect from 1 April 2016.

Passenger Transport by Air

• Air fares have shown variable movements in April which can depend on the position of

Easter.

Monthly % change for CPI air fares index Year February March April 2010 1.7 7.7 -1.0 2011 2.1 2.1 29.0 2012 -1.6 4.4 7.4 2013 9.2 5.3 -6.4 2014 3.3 1.9 17.9 2015 5.3 2.7 4.5 2016 5.6 22.9

• The air fares index used in the RPI is the same as that used in the CPI, and is included in the

other travel costs section.

• As announced at the March 2015 Budget, the rate of Air Passenger Duty (APD) for the tax

year 2016 to 2017 will increase in line with the Retail Prices Index (RPI), with effect from 1

April 2016. (www.gov.uk 16 March 2016)

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COMMUNICATION Postal Services

• Royal Mail has announced that from 29 March 2016, the prices of a First Class stamp and a

Second Class stamp will rise by 1p to 64p and 55p respectively. (royalmailgroup.com 19

February 2016)

HOUSING (RPI) Mortgage interest payments (MIPs)

• The Bank of England Bank Rate remained unchanged at 0.5% on Thursday 17 March 2016.

• The change in average mortgage interest rates recorded in the RPI was -0.01% between

March and April 2015. The Bank of England Bank Rate remained unchanged at 0.5% in

March 2015.

• A one percentage point change in the average mortgage interest rate contributes

approximately 0.9 percentage points to the 1-month percentage change in the RPI. Council Tax

• The Department for Communities and Local Government (DCLG) announced that the

average Band D council tax set by local authorities in England for 2016-17 will be £1,530 – a

3.1% increase on last year. (www.gov.uk 31 March 2016)

• The Scottish Government announced that the council tax freeze will continue until April 2017.

(news.scotland.gov.uk 2 March 2016)

• The Welsh Government announced that the average band D council tax for Wales for 2016-

17 is £1,374 – a 3.5% increase on last year. (gov.wales 24 March 2016)

• The Northern Ireland Executive announced that in the 2016-17 rating year, there will be an

increase of 1.7% for the domestic regional rates. (northernireland.gov.uk 23 February 2016)

• The recorded increase for council tax and rates in the RPI last April was 1.1%.

Social Housing Rents

• The Summer 2015 Budget announced that rents for social housing would decrease by 1%

each year for the next four years, starting in April 2016.

BUDGET 2016

• Budgetary measures that come into force in 2016/17 will add an estimated 0.05 percentage

points to the CPI 1-month rate. Further details are available in the article Estimated Effect of

the Budget on Consumer Prices Index and Retail Prices Index.

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https://www.ons.gov.uk/releases/estimatedeffectofthebudgetonconsumerpricesindexandretailpricesindexspring2016

https://www.ons.gov.uk/releases/estimatedeffectofthebudgetonconsumerpricesindexandretailpricesindexspring2016


Next publication: 17 May 2016 Media contact: Tel: Luke Croydon +44 (0) 845 6041858 Out of hours media line +44 (0) 7867 906553 Email: [email protected] Statistical contact: Tel: Philip Gooding +44 (0) 1633 455896 Email: [email protected] Website: www.ons.gov.uk Consumer Price Inflation recorded message (available after 9.45am on release day): Tel: +44 (0) 800 0113703 Consumer Price Inflation Enquiries: Tel: +44 (0) 1633 456900

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Consumer Price Indices Briefing Notes - March 2016

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